Banks and financial institutions have been experiencing considerable difficulties in recovering loans and enforcement of securities charged with them. The procedure for recovery of debt due to the banks and financial institutions which is being followed has resulted in a significant portion of the funds being blocked. The committee on the financial system has considered the setting up of the special tribunals with special power for adjudication of such matters and speedy recovery as critical to the successful implementation of the financial sectors reforms. An urgent need was, therefore, felt to work out a suitable mechanism through which dues, to the banks and financial institutions could be realized. In 1981 a committee had examined the legal and other difficulties faced by Banks.